|Due date:||Week 10|
|Word count / Time provided:||1500 words|
|Unit Learning Outcomes:||ULO-1, ULO-2, ULO-3, ULO-4, ULO-5|
|Course Learning Outcomes:||CLO-1, CLO-4, CLO-6, CLO-8, CLO-9|
|Graduate Attributes:||GA09, GA11, GA12|
Marking Information: The Proposal will be marked out of 100 and will be weighted 30% of the total unit mark.
Read the case study below and complete the exercise at the end.
Case study: How Tumi Cut Inventory and Increased Sales
A decade ago, Tumi, Inc.’s customer fill rates were below 80%, and the company had an excess of inventory - among other problems. But when the travel products maker decided to retire its legacy systems and standardize on SAP Business Suite, it experienced business expansion and better customer service. This profile details Tumi’s implementation success story and its transition to a more retail-focused company
At a Glance
Headquarters: South Plainfield, New Jersey
Industry: Maker of luxury luggage, handbags, and other travel accessories
Founded in 1975
First retail store opened in 1997
140 retail, department, and specialty stores in 65+ countries 100+ patents for product design and component parts
SAP solutions: SAP ERP
SAP NetWeaver BW
The agenda of any executive meeting usually addresses the same topic, whether directly or indirectly: how to expand the company’s customer base and keep existing customers satisfied and coming back. At luggage and travel products maker Tumi, Inc., when management meetings concentrated on the company’s bulging inventories and poor customer fill rates, everyone looked to the IT organization for answers. And when the discussion turned to accelerating the company’s European expansion, again the group looked to IT for a solution.
At that time, in 2001, IT didn’t have an easy answer. Tumi’s patchwork of homegrown, US- centric legacy systems provided little capability for improved inventory management, customer satisfaction, and global expansion. Disparate systems for important processes such as order-taking, warehousing, and financials weren’t connected and relied on periodic batch updates to provide a somewhat consolidated but infrequent view of operations.
In short, the company’s growth was being stifled at a critical time, and the IT organization did not have the appropriate technology in place to handle the business’s demands for a new direction.
“We knew our customer fill rates were below 80%, and we had a ton of capital sitting in inventory,” says Jim Walsh, Vice President of IT. “We heard this once a month at our management meetings, and we would tell the group we were working on solutions — but, in reality, those were just Band-Aids.”
Today, almost a decade later, those management meetings at Tumi operate very differently, and senior business leaders’ view of IT has shifted dramatically. According to Walsh, “The IT organization is much more of a business driver today than it was in the past.” Now, business process owners seek out the IT organization’s advice and support in designing and executing their business strategies.
“When we have steering committee meetings and discuss the three-year plan, no one asks if there will be an IT issue,” says Walsh, adding that there really aren’t “IT problems” anymore but rather “business problems,” which are collaboratively solved with IT being one of the organizations contributing to the solution.
What’s behind this shift isn’t simply an increase in the size of the IT organization. (Walsh’s core team remains steady at 12 people.) The difference has been Tumi’s decision to retire its legacy systems and standardize on a single integrated enterprise system, which started with a “big-bang” implementation of SAP Business Suite solutions to produce a large amount of change in a short amount of time.
Matching Technology to Business Needs
The first step in Tumi’s IT-driven business transformation was perhaps the most important — selecting the right enterprise system. After managing with its legacy systems for so long, one of Tumi’s top priorities in evaluating an enterprise system was scalability. The company wanted to be sure that no matter where its business initiatives took it, growth would not be constrained by IT systems. It also wanted the flexibility to deploy solutions that would directly affect its most pressing — and often changing — business challenges.
To address these needs, Tumi deployed SAP Business Suite, specifically for the following functionality:
both wholesale and retail customers
But technology alone would not solve all of Tumi’s challenges. Through its close partnership with SAP implementation specialist Answer think, Tumi identified SAP installation best practices and then redesigned some of its business processes to better leverage the new systems. “We agreed ahead of time that we would make nothing custom to Tumi,” says Walsh. “We wanted to implement proven solutions that other companies have used already very successfully.”
How Technology Drives Business Expansion
With a foundation of new, scalable solutions in place, business expansion at Tumi is happening more rapidly than previously expected. Since its SAP implementation go-live, Tumi has opened two new US distribution centres, increased distribution to overseas markets, and become a much more retail-focused company. “We were predominantly a wholesaler when we implemented our SAP solutions, but we’re now becoming a retailer as well,” Walsh says. “It was the natural migration of our business, but it would have been impossible with our legacy systems. Now we’re distributing to our own stores and have offices and sales teams in many more countries.”
Tumi has seen some dramatic business results since implementing SAP Business Suite solutions, most notably:
30% reduction in inventory levels
38% reduction in warehouse space
44% reduction in days sales outstanding 25% increase in sales
The new IT strategy and SAP implementation not only drove the operational aspects of the retail expansion — the improved inventory management processes actually helped free up working capital to allow Tumi to pursue its retail channel. Walsh says, “We brought our inventory levels down by 30% while increasing sales by 25%.”
As Walsh explains it, in the past, Tumi forecasted using spreadsheets. And because the manual process took so long, it was done infrequently, providing longer-term forecasts at best, which required higher inventory levels. However, the visibility provided by the SAP Business Suite solutions allows Tumi now to develop more accurate and timely forecasts and then base its manufacturing and supply chain decisions on real demand instead of longer- term forecasts.
“When actual demand starts coming in, we can see how close we are to the forecast and plan our inventory based on that,” Walsh says. “We are talking with our manufacturing suppliers about inventory, telling them to push out certain purchase orders and bring others in, which we weren’t doing before because we had nothing to base our recommendations on. This is where we get our efficiencies — in exchanging information, in being able to alert everyone in our supply chain of potential delays, issues, and shortages, and in being able to react quickly.” The “actual demand” data comes from Tumi’s retailers being connected to its SAP CRM application, which provides instant data on product pricing and availability throughout its various sales channels. And on a broader scale, Tumi is using SAP CRM to analyze consumer buying trends to better respond to consumers’ changing needs and put products where they are needed most.
The result is a dramatic 30% reduction in the inventory it carries and a corresponding 38% reduction in warehouse space, which equates to a significant increase in the working capital available for new projects, such as launching a retail sales channel.
Providing Customers with Better Service
Today, Tumi operates roughly 90 retail stores worldwide, with many additional partner-run locations in operation. Going forward, Tumi plans to continue its transition from wholesaler to direct-to-consumer retailer, both online and in its stores. But retail requires a more hands- on customer service model than wholesale, which is another area where Tumi’s SAP CRM application is driving the business forward.
“When a retail customer calls to find out where an order is, we used to have to put the customer on hold while we called the warehouse. Our customers expect more than that,” Walsh says. “Now with SAP CRM, we can provide better service to those consumers. If they sent a bag in for repair, we can tell them exactly where it is, no matter who picked up the phone. It’s all in the same system now.”
These various customer-facing enhancements, such as improved inventory levels, fill rates, and customer service — made possible by Tumi’s new SAP solutions — are setting the stage for happier, more satisfied consumers, which leads to repeat business and more sales opportunities.
Imagine you are a manager of a company which is also running a business like TUMI with similar capital and infrastructure. It has many departments such as sale, marketing, finance, HRM etc. By reading the above article, you are motivated to upgrade your system to ERP. You are required to make a business proposal to convince your CEO about installing ERP system in your company. You must address the followings in your proposal through considerable amount of literature review.
1. What is Enterprise Resource Planning (ERP)? Its benefits and limitations. 2. Why do you believe your company should be upgraded with ERP? 3. List the top 10 brands which offer ERP solution to SMEs. 4. Do a comparative analysis among of them. 5. Which brand do you think is feasible to your company, other than SAP, and why? Justify your arguments with a detailed cost benefit analysis.
In the past few decades, most of the companies were preferring SAP software for their company growth and development. But as we can see, this software is not meant for every company. It has many pros and cons which has already impacted our performance in a negative way. Our company is not able to make good decisions as majorly faults are occurring from the application. One of the deadliest cybercrime which is PHISHING is spreading their roots in the market with the high rate. As this type of cybercrime is able to main propaganda is to steal all the confidential data from the company with a single email or a spam message on user personal devices. They will ask is your simple details from where the will get all the information about the user.
This case study is about the organization name TUMI, which are making the travel bags for their customer. The company was facing a major crisis in their IT department. The IT department was not able to organize the data and their inventory as per the desired requirement of the company. Due to their customers were suffering. The major change which the IT department has made in their system is that they have changed their software with SAP. The SAP software helped the TUMI in solving their main concern of inventory management.
Scope of Statement
The scope of this report is to understand the adaption of the new software in the company. As with the old software our company is not able to achieve their desired goals and profits just like the case of TUMI. But as they changed their software, their performance has also increased. With the same scenario, we will understand the ERP software and their benefits in our company.
Enterprise Resource Planning
ERP stands for enterprise resource planning, and it is the latest form of technology which is taking over many companies. This ERP software is helping in the management of data and the inventory of the company is a very efficient way with the help of advanced technology based application and software. As per author Asgar & King,( 2016) this software helps the user in providing the accurate piece of information at every point of time. It connects every department of the company which is finance, sales, HR and operational. With the help of connection in customers in their application. This journal here discusses about the ERP by Daneva, M. (2004).
Advantages and disadvantages of ERP software have been discussed below:
Reasons for using ERP in the company
There are many reasons for using ERP software in our company. The main reasons for using ERP has given below with justification:
This journal is explaining the major reasons for the selection of ERP by Parthasarathy & Sharma, (2016)
Top 10 ERP softwares and comparative analysis
Bizowie Cloud Epicor Global Shop Solutions Netsuit
Sage 100cl Sage 300cloud SYSPRO ERP Aquilon
Onramp Solutions ERP Infor CloudSuite Industrial (SyteLine
Other Software rather than SAP
If we talk about any other software rather than SAP which will be suitable for our company will Sage100cl ERP. It is that software which will manage all the activities which are required to perform the majority of the task in the company. It will help in eliminating many barriers which SAP program was not able to identify. The reasons why to choose Sage100cl ERP is given below:
Mechanism of Phishing
The Mechanism of phishing has been explained below:
This paper here is explaining the mechanism of phishing by Patel & Patel, (2012).
Precaution For Phishing:
There are many things which we can do to protect our company from a phishing trap, few of them are given below:
This journal is representation of the prevention methods from phishing by Gupta & Pieprzyk, (2011)
ERP software is much more updated than the SAP software as it will help in detecting all the malicious activities. As if this kind of activity happened the TUMI Company with the SAP software, it will not be able to handle the effect which has been created by the software.
In the conclusion of the report, it has been analyzed that the majority of the company performance depends upon the selection of software which they are choosing for their day to day operations. BY choosing the right option for their organization, they will be able to manage all the functions like supply chain, inventory management, and their cost. the company has to understand that this type of investment process can save their long time investment. The company has to understand their structure and their requirements. With the understanding of all the information, the company will be able to get their desired rate of return and will be able to satisfy their customers.